Delta Air Lines, Hawaiian Airlines and the Air Line Pilots Association (ALPA) have filed suit against the Export-Import Bank of the US (US Ex-Im) alleging negative economic consequences from the bank's loan guarantees to foreign airlines.
The plaintiffs claim that aircraft loan guarantees from US Ex-Im subsidise foreign airlines who then have a lower cost of capital and can undercut the fares of their US competitors, according to the suit filed with the US District Court for the District of Columbia on 3 April. This violates the bank's charter under the reauthorisation that was passed by the US congress last year, they claim.
Loan guarantees to Emirates, Etihad Airways, Korean Air, LATAM Airlines Group and LOT Polish Airlines for Boeing aircraft deliveries cited in the lawsuit. The plaintiffs objected to these deals prior to their approval during the past year.
"Each of these foreign airlines competes directly with US airlines for passengers flying internationally, through competition on nonstop routes or on connecting routes, or both," say the plaintiffs. "And each of these foreign airlines uses Ex-Im bank's subsidies to enhance its competitive position vis-à-vis US airlines on those competing routes."
US Ex-Im's president and chairman Fred Hochberg as well as other senior bank officials are named as defendants in the lawsuit.
The export credit agency (ECA) did not respond to requests for comment.
Delta and US airline industry body Airlines for America (A4A) have separate lawsuit against US Ex-Im pending in the DC circuit court of appeals. The case challenges the ECAs practice of not looking at the adverse economic conditions that are created by its aircraft subsidies.